Food on-demand (or Uber for Food). Video on-demand (or Uber for video). Books on-demand (or Uber for books).
The on-demand services championed by Uber has been such a success that entrepreneurs around the world are trying to disrupt industries with the same model, which has brought forth a sea of disruption to traditional business, job models, and consumer purchase behaviour.
So, what industry do you think had the most competition in on-demand services?
Enter Foodpanda — Singapore’s First Popular On-Demand Food App
Foodpanda was founded by a Malaysian entrepreneur Sidney Ng and Rico Wyder in March 2012. The app was first launched in Singapore and other SEA countries, with the aim to make online food ordering fuss-free, fun and fast.
In Singapore, the company mostly focused in the Central Business District area and only included 51 restaurants when it first started.
It was an idea welcomed by many restaurants and food services who might want to offer delivery services but don’t have the economic or manpower powers to do so.
“We definitely expect an increase in customer numbers from the cooperation with foodpanda”, said Jacky Stevens, restaurant owner of Picotin Bistro.
Back then, food delivery was still a novel idea and most people only tried the app out of novelty or when they want to celebrate a particular occasion such as birthdays and anniversaries.
Deliveroo Singapore – A New Challenger Arrives
Fast forward 4 years to 2016, consumers now use on-demand food delivery app as part of their daily life and often orders when they are too lazy to cook their meals, or when they work late nights in office, or even for a date night!
This has allowed Foodpanda to become a food delivery behemoth with 720 restaurants and see revenue grow 400% in the latest revenue report. All these signs points to a major shift in how consumer consumes food and the potential of growth in this market.
But this also meant that Foodpanda is going to attract competitors in this lucrative space.
The Battle of Efficiency and Simplicity
While Foodpanda managed to become the most popular service in Singapore, there were some complains about its business model and services. Two things stood out immediately when observing the chatter online — delivery time and cost.
Foodpanda was delivering on a lot of its food in the 45 to 60 minutes and its delivery pricing was a mess because it depended a lot on what you ordered and from where.
Deliveroo Singapore saw this opportunity and decides to enter the market.
Its USP was targeted specifically at the areas where Foodpanda is underperforming. They were offering delivery in the 30 minutes range and offers a 2-tiered delivery fees based on the value of food that you ordered.
This proved to be the right move as Delivery Singapore expanded and secured over 450 partners in a short period 6 months, more than half of what Foodpanda achieved in over 4 years.
At the time of this writing, Foodpanda has also reacted to the competition and improved their business model such that delivery timing now averages around 30 minutes. But this might prove to be too late because Deliveroo Singapore has already cemented themselves as the efficient and simple delivery app.
Overall, Singapore consumers will get more comfortable and familiar with food delivery services, and will consistently demand to have better services with more varied choices. The app which effectively captured this will definitely dominate the market in the years to come.